According to reports, the North American plastics industry might be getting a much needed boost in coming years.
South African company Sasol Limited has given final approval for an ethane cracker and six petrochemical plants in Lake Charles, Louisiana. In addition to producing plastic feedstock ethylene, the project is estimated to cost nearly $9 billion and create thousands of new jobs. News of this project comes just months after Sasol announced it would be building a high-density polyethylene plant in Texas.
Further north, Badlands NGL has announced plans for a PE manufacturing plant in North Dakota. Badlands is said to be investing $4 billion in the development, which is projected to create around 500 new jobs.
Sasol’s plants are expected to begin operations by 2018, and Badlands has stated they hope to have their plant fully operational by the end of 2017.
According to Plastics News, most of the polyethylene manufactured at Badlands’ North Dakota plant will be marketed in the United States, “but the company also expects exports to Asia, South America and Europe, shipping from both Pacific Northwest and East Coast ports.” It’s not yet clear where Sasol will market, but it’s safe to assume there will be great interest in their products within the United States and abroad.
Announcements about new plastics producers seem to be more and more frequent these days, which is likely an indicator of the easier and cheaper access to natural gas and oil due to hydraulic fracturing and horizontal drilling. Only time will tell what the increase in production will mean for raw polyethylene prices—because the market is truly worldwide, the answer isn’t as simple as it might seem.